Entities in the income allocation system
Regulations: Art. 31 Regulation Personal Income Tax
Entities under the income attribution regime that carry out economic activities will apply the simplified modality of the direct estimation method, unless expressly waived, provided that the following requirements are met:
That all its partners, heirs, community members or participants are natural persons who pay personal income tax.
That the entity meets the previously mentioned requirements, determining the application of the modality.
Consequently, the application of the direct estimation method to these entities does not depend on the circumstances that occur individually in each of its members, so the entity may determine its performance in accordance with this method, regardless of the situation of the members. partners, heirs, community members or participants in relation to the activities they personally carry out.
The waiver of the simplified modality of the direct estimation method must be made by all partners, heirs, community members or participants. However, the revocation of said resignation does not require unanimity, in the terms provided by the regulations governing the census declaration.
The net return determined by the entity under the income attribution regime will be attributed to the partners, heirs, community members or participants, according to the rules or agreements applicable in each case and, if these are not confirmed to the Administration in a reliable manner, it will be attributed in equal parts.
Please note that, with effect for tax periods beginning on or after January 1, 2016, civil companies with a commercial purpose are taxpayers of Corporate Tax, so the income attribution regime is no longer applicable to them.